Research: No significant OTT impact on pay-TV

Although OTT video services are providing another competitive challenge to established cable video and satellite or IPTV offerings, market research firm Infonetics Research doesn’t expect OTT to have a significant impact on pay-TV subscribers.

The firm’s Pay TV Services and Subscribers report, which forecasts and analyses the telco IPTV, cable video, and satellite video services markets, notes that in 2008, cable video made up 59 per cent of the global pay TV market, satellite video brought in 38 per cent and IPTV was just a drop in the bucket.

“Now cable operators are being challenged not only by attractive pricing and services from IPTV and satellite operators, but by all OTT video services, like Netflix and Amazon On-Demand, and by connected-TV devices, which are prompting consumers to cut the cord,“ notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.

“Net new cable video subscribers continue to decline in North America and EMEA, and the small increases in Asia and Central and Latin America aren’t offsetting those declines. While we don’t expect OTT to have a significant impact on pay TV subscribers because operators are responding to OTT with their own enhanced delivery offerings, we do expect cable video’s share of pay TV revenue to decline as satellite video increases — nearly catching up to cable by 2015 – while IPTV services grow to 15 per cent of the market,” he advises.

Other market highlights include:

The global pay TV market, including telco IPTV, cable and satellite video services, totalled $125 billion in the first half of 2011 (1H11) and is forecast by Infonetics Research to grow to $353 billion by 2015

Most of the future growth in the pay-TV market will come from satellite video and telco IPTV services

North America remains the highest-value pay-TV market, benefiting from the highest average revenue per user (ARPU), followed by Asia Pacific, which benefits from a pay-TV subscriber base nearly four times the size of that of North America

DirecTV and Comcast are the global market leaders for pay-TV service revenue and subscribers in 1H11, respectively, with DirecTV continuing to enjoy the highest ARPU in the industry and Comcast now with 22.5 million subscribers

In the first half of 2011 (1H11), the top 20 pay-TV revenue leaders accounted for 52 per cent of the revenue, while the top 20 subscriber leaders represented just 29 per cent of the subscribers